This article is written by Akhilandeswari Bonam, a student of Sri Padmavati Mahila Visvavidyalayam, Tirupati.


Material Alteration is a party to the negotiable instrument. Material alteration can change the character of the instrument or the rights and obligations of the parties. An original instrument can be called an altered instrument after it is altered.

Material alteration occurs, when the changes have taken place in the instrument without the knowledge of the drawer, and changes made after the cheque has been issued. Where the nature of the instrument has changed by the alteration, it amounts to a material alteration. All material alterations must have the drawer’s approval with his full signature where the alterations are made. Without the permission and consent of the drawer, a blank cheque cannot be enforced. 

Instances of Material Alteration

Alteration of date, name, rate of interest, the sum payable, time of payment, place of payment, the addition of parties, tearing a material part of the instrument, by increasing or affixing stamps, by the erasure of an account payee crossing, an order cheque to a bearer cheque except by or with the consent of the drawer.

Illustrations:- The drawer can change the instrument before issuing a cheque. It is always open to a drawer to voluntarily re-validate a negotiable instrument including a cheque. Veera exports vs. T.Kalavathy, 2002. The alteration may be made on changing the bank at which the bill is payable. He may also change the rate of interest in the instrument. Seth Tulsidas Lalchand vs.Rajagopal-1967.

Alterations which does not Constitute a Material Alteration

Alterations which are made with the consent of the parties and alteration which corrects the mistakes of data or clerical error. The alteration is not apparent and the instrument goes into the hand of the holder.

After alteration made in the instrument, the parties of the old instrument cannot be held liable to the new instrument or altered instrument to which they never consented.
Gaur Chandra vs Prasanna Kumar. The party who consents to the alteration or who alters the instrument is not entitled to complain against such alteration.

A material alteration is one that varies the rights, liabilities, or legal position of the parties as ascertained by the original instrument (Loonkaran Sethiya vs Ivan E. John, 1977). Whether an alteration is prejudicial or beneficial to the parties, the liability of parties is avoided by material alteration. 

Effects of Material Alteration

The material alteration of a cheque renders such instrument void and same cannot be enforced against any person who was a party to such instrument at the time of material alteration and did not give his/her approval to it.

Responsibilities of Banker

The paying banker should not make a payment on a materially altered cheque. If the alteration is confirmed by the drawer with his full signature, the banker should honour it. Material Alteration does not affect the collecting banker. Without the permission and consent of the drawer, a blank cheque cannot be enforced.

The Crossing of Cheques   

The crossing of cheques means drawing two parallel lines on the face of the cheque.  Crossing of the cheque is an instruction to the bank given by the customer on how to give payment and who can give it. Crossed cheque cannot be paid at the counter, it can be endorsed to anyone, payment will be through the bank.

Object: A crossing is a warning to the bank not to make payment of the crossed cheque over the counter. Crossing functions as a caution to the paying banker.

Types of Crossing Cheques

General crossing: When a cheque bears two transverse lines across its face and the addition of words in between those lines.

  • Amount cannot be paid in cash
  • Amount can only be credited to the bank account of either the named payee or an endorsee

Special crossing: When the name of the banker is written on the face of the cheque. When the words “not negotiable” are added to the cheque, then the cheque losses its negotiability..

  • Amount cannot be paid in cash
  • Amount can only be credited to a bank account in the named bank.

Account Payee Crossing: Where the drawer adds the words like account payee, or account payee only to the general or special crossing it gives direction to the collecting banker to collect the cheque and credit the amount to the account of the payee only. This crossing is not statutorily recognized.

Not Negotiable Crossing

  • Cheque can be endorsed
  • Transferees cannot have or give a better title to the cheque than the transferor.

The addition of words takes away the main feature of negotiability that a holder with a defective title can give a good title to the subsequent holder in due course. It is a statutory crossing.

Protection of Paying Banker from Liability in the Following Cases

  • Where a cheque is drawn by the payee with an order of drawer, the banker is not held liable if such payee is a fraud, or the banker is not held responsible for the forged signature of the drawer.
  • The banker is not held liable in a cheque payable to the bearer. In this case, it doesn’t matter whether the apparent holder is the owner of the cheque or not.

The banker must have acted in good faith and without negligence.

  • The banker had received the payment of the crossed cheque.
  • The collection was made by the bank on behalf of the customer.

Double-crossing: When a cheque bears two special crossings is known as double-crossing. In this, the second bank acts as an agent of the first collecting banker. It is made when the banker in whose favour the cheque is crossed does not have a branch where the cheque is paid.

Opening of crossing: The cheque can be cancelled by the drawer by writing the words “pay cash” on the cheque with his full signature. Law does not permit but it has been risen out of custom.

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